BULLETIN >> U.S. FEDERAL DEFICIT SHRINKS TO $53 BLN IN JULY

Dow Jones Big Charts.MarketWatch.com ^ | 8/10/05 | Rex Nutting, MarketWatch

[SierraWasp]

BULLETIN >> U.S. FEDERAL DEFICIT SHRINKS TO $53 BLN IN JULY

[Huck]

A government in a country with a rapidly growing 12 trillion dollar economy can afford to borrow 100-360 billion a year without worrying too much about serious economic problems

What is clear is that the GOP has severed any connection it ever had (which now that I think of it is dubious) to spending restraint. They just spend on different things. But now the grass roots GOP is arguing vehemently that 300 billion deficits are good policy. We shall see.

[BOBTHENAILER]

Thanks for acknowledging the obvious, positive changes in economic policy never produce results over night. It's like steering the largest oil tankers. Slight moves take a while to produce results.

[Deo et Patria]

Still trying to stimulate conversation about whether World War II was "worth it," Buchananite?

We live in a different world now. Budget deficits are ok in a time of war. And we ARE at war.

[bnelson44]

1) 100 Billion is a LOT of bubbly

2) Can you actually add them together like that and make accounting sense?

[Deo et Patria]

Bravo.

[expat_panama]

I think you misunderstood me. I said a chart of federal deficits.

You did, and I erred by trying to go too fast.  Give me another chance and I promise to hold back a bit.   Deficits being difference between spending and revenue, had to be estimated using the graph.  Then again, the graph did show how even when the average deficit went up from Clinton to GW Bush, the debt went down. 

 

Just to show how my heart's in the right place, here's a deficit graph from the Treasury Dept. report that the Market Watch article was featuring.

Also, check out  revenue and spending (click here). What impressed me is how much better off we'll be once we chuck that stupid Social Security.   I don't remember the Union Democrats pushing that solution.

 

[inquest]

Those data on the debt prove nothing about Bush's presidency. Deficits were sharply reduced during Clinton's terms (mostly by the Republican Congress), so that's going to mean that the average dept per dollar of GDP will be lower after his term than during it.

[RetiredArmy]

Party pooper! ;>)

[Huck]

Thanks for acknowledging the obvious, positive changes in economic policy never produce results over night.

You asked. It's so funny. On the one hand, people say the Bush tax cuts have already fueled growth. Yet, the Clinton economic policies had nothing to do, so they say, with the expansion that followed. The Reagan tax cuts apparently took a while to take hold. maybe the Clinton boom was really a Reagan boom. But wait! The boom wasn't real! It was all a hoax. So was it the Reagan hoax? I am not saying I know what the best way to go is, but I can recognize BS.

[Huck]

Why not? If we were off by 400 bil last year, that got added to the debt, right?

[BOBTHENAILER]

maybe the Clinton boom was really a Reagan boom. But wait! The boom wasn't real! It was all a hoax.

Clinton's boom was over just before he left office. Reagan's tax cuts, the dot com rise (and fall), decent commodity prices and a few other less significant factors fueled the Clinton boom.

[bnelson44]

see post 146

[Huck]

I saw it. It shows consistent deficits being added to the nat'l debt.

[Huck]

Clinton's boom was over just before he left office.

So was Reagan's. Wasn't there a crash in 87 and then a recession?

[Huck]

Where do you get the debt going down? It's not. It's going UP.

[AuH2ORepublican]

"So if this happened after all these tax cuts, this has got to mean that spending was cut.

Am I missing anything?"

---

That's a common misconception perpetuated by the media. Here's a primer on supply-side economics that explains how tax cuts lead to increases in tax revenue for the government (please keep in mind I'm no Dr. Laffer, so my explanation may not be perfect):

1. When taxes are too high, people do not have as much of an incentive to work or invest, so the economy stagnates (thus reducing taxable income). In addition, people have a larger incentive to avoid taxes (whether legally or illegally), so the government tax revenue is reduced further.

2. When high taxes are lowered, people have a greater incentive to work and invest, and less of an incentive to avoid taxes. This leads to much higher taxable income (and thus much higher tax revenue, even with a lower tax rate), and also leads to less tax avoidance (which also results in more tax revenue).

So the Bush tax cuts of 2003 are the reason for the increase in tax revenues, which have resulted in a reduction in the budget deficit in spite of the fact that government spending has increased (albeit at a lower rate than the rate of increase in tax revenues).

For the record, when Reagan cut in half the rate of the highest income-tax bracket in 1981, it led to such an economic boom (and reduced tax avoidance to such degree) that federal tax revenue nearly doubled between 1981 and 1989.

[Ernest_at_the_Beach]

Speaking of Clintooon, this just in:

The Daily Terrorist Round-Up 8/10/05

********************************************************

Jamie Gorelick and the Clinton Administration's Policies Protected 9/11 Cell

Stay Angry

[expat_panama]

...expenditures aren't simply determined by what's been appropriated by law, but by what's actually been spent by the various agencies...

That's the difference between the annual changes in the public debt (changes in what we owe), and the annual budget deficit (how much we think we'll change what we owe).  Personally, I say that following the public debt does a better job of showing what we're actually doing.

But say what you will about "what they've done for the past four years", I for one am sure glad that we're not talking about something Gore & Kerry did for the past four years.

[QQQQQ]

From your post (Marketwatch): "Through the first 10 months of the government's fiscal year, the federal deficit has totaled $302.6 billion, $110.3 billion less than at this time in 2004. "

===

THIS is a 25% drop, which is HUGE. AND President Bush did it without raising taxes, in fact he cut taxes.

I don't understand how some people claiming to be conservatives aren't applauding this.

[Huck]

Saw this story this morning. Not sure what it's got to do with deficits, but thanks anyway. Looks like we need a commission to investigate the commission.